Introduction to Human Resource Planning

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Assignment on the topic of,

For the subject of

HUMAN RESOURCE MANAGEMENT

Submitted to: Prof. Anusha Patil

2011-12


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Team Members

Deepa Jaisinghani 61

Jatin Jaisinghani 62

Harish Jangir 64

Ameya Mukkadum 102

Tarun Panchmia 108

Rachita Patnaik 113


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ACKNOWLEDGEMENT

We are grateful to our professor Anusha Patil for giving us anopportunity to work on the subject of Human Resource

Management which has enhanced and enriched our knowledge in

the field of Human Resource Management.

We would also like to thank our friends and colleagues at

LLIM for their support and help.


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Table of Content

Introduction to Human Resource Planning 4

Objectives of Human Resource Planning.5

Types ofPlanning..6

Forecasting Technique in Human Resource Planning.9

The Questionnaire10

The Case study( BPCL & Intelent)..11

Examples.18

Conclusion..20


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Introduction to Human Resource Planning

comprehensive Human Resource Strategy plays a vital role in the achievement of

an organisation's overall strategic objectives and visibly illustrates that thehuman resources function fully understands and supports the direction in which

the organisation is moving. A comprehensive HR Strategy will also support other

specific strategic objectives undertaken by the marketing, financial, operational and

technology departments.

In essence, an HR strategy should aim to capture "the people element" of what an

organisation is hoping to achieve in the medium to long term, ensuring that:-

It has the right people in place

It has the right mix of skills

Employees display the right attitudes and behaviours, and

Employees are developed in the right way.


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Types of Planning

ggregate Planning: Fills the need for groups of (lower-level) employees Forecasting demand for employees

Examine Factors: Strategy, Growth Rate, Market Demand, Technology,Competition

Write down assumptions that affect need for employeesUse Statistical Regression / Experience to Make Forecasts

Bottom-up (Unit) Forecasting: Each business unit produces forecast based on local goals Local goals are passed up the chain and aggregated Less Efficient, but makes business responsive to market needs Needs a system of accountability to avoid units"hogging" resources,

resulting in sub-optimization.

Top-down Forecasting Senior Management produces forecasts based on company goals Company goals are passed down the chain More efficient, but less responsive to market needs

Mixed forecasting Senior Management and Local Business Units Produce Forecasts Middle-Management Negotiates Forecasting Workforce Demographics

A


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PROS AND CONS OF SHARING SUCCESSION PLANNING

Tell Pros: Could motivate employee to stay with the company and work

harder

Cons: Could create expectations for the employee, and a sense ofobligation for the employer

Don't Tell Pros: Greater Flexibility, easier to change mind later Cons: High performers may leave for opportunities elsewhere


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Forecasting Technique in Human Resource Planning

Determining the human resources required by an organization involves identifying the jobs,

skills and knowledge required by those jobs and the performance level of the current

workforce. Using this data, you can forecast hiring or reorganizing needs for both the short

and long term. Forecasting methods typically includes using past data to predict future

staffing. Additionally, organizations can use survey, benchmarking and modeling techniques

to estimate workforce staffing numbers. Use several methods and cross-check your findings

to obtain the most accurate results.

Step 1

Analyze your work operations. Conduct a detailed job analysis for each function in your

company and list the policies and procedures required to complete each task. Document the

standard output per hour per person. Determine the desired level of output in order to

calculate the number of people you need to produce that volume of operations.

Step 2

Conduct a series of online surveys using the Delphi technique--asking several experts in your

organization their opinion on forecasting needs based on their experience managing the

employees in your organization who directly contribute to the creation of products or

services. Experts typically do not share their opinions with each other. Create and distribute

your survey using a tool such as Zoomerang, SurveyMonkey or Qualtrics to gather your data.

Examine the input and prepare a forecast. Send the forecast to the original participants to

get their new input. Repeat the survey process until all participants reach consensus that

the forecast appears accurate.

Step 3Use calculators available from the Society of Human Resource Management website (see

Resources) to calculate metrics such as the average length of service and 90 -day

turnover rates based on your current human resources data. Use this information to help

predict future staffing needs.

Step 4

Read reports available from the Department of Commerce on workforce planning needs to

help you learn about trends and forecast your budget for hiring, training and paying staff

required to compete in a global marketplace. For example, the Department of Defense

estimates it spends about $250 annually to support workforce foreign language needs.

Step 5

Document your forecasting process and follow it consistently throughout your company so

that all managers align their forecast to your strategic direction, identify skill gaps, create

action plans to address shortages, implement plans to hire and retain skilled personnel and

evaluate forecasts on an ongoing basis. Using this model, you can more accurately guide

workforce planning efforts for all skill areas such as information technology and knowledge

management.


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The Questions

1. In what way Human Resource Planning is applied in your organisation?2. How is the aggregate manpower planning (junior level employees)

carried out?

3. What are the main challenges you face for aggregate capacity planning?4. How do you overcome them?5. How do you carry out forecasting of requirement of labour?6. What tools are used to identify attrition?7. Are there any measures taken to retain the expected attrite?

8. What strategies do you follow for managing shortages and surpluses oflabour?

9. How is succession planning charted?10.What is the ratio of succession for external sources to internal sources?11.What are the main challenges you face for succession planning?12.What are the Developmental strategies used to internally groom

candidates?

13.What's your perspective on downsizing?


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The Study

For the purpose of the study, we have analysed the HR planning, Forecasting and Succession

Planning practices at a Public Sector Unit and a Private Sector Unit and below are the findings.

In what way Human Resource Planning is applied in your organisation?

At BPCL

Human resource manpower planning at BPCL is carried out for a span of 10years at one go.

The last one was done in 2001, and there was a major restructuring carried out at that point

of time.

An external agency was hired to analyze job profile, number of position, roles and

responsibilities, the scale of performance, etc.

The next manpower planning is currently under process, however this time around it is

being carried out internally. Minor changes based on the business requirement, if any are

internally accommodated. There is no permanent change made to the roles and position in

the interim.

The current Manpower planning being conducted internally, that has representatives from

all the walks of life, all the various departments, back office, non-management officers etc.

the idea behind this exercise was to standardize the procedures across location and rework

the resources required for optimum utilization. The basis of all these should be offorecasting of business requirements.

At Intelenet Global Services

Human Resource Planning is deeply involved in every aspect. Top that effect, there is a

yearly Summit that is conducted which invites representatives from all departments and the

overall organization goals are discussed and each department representative is asked to

share their plans of how they can contribute to the over goals. Periodic reviews are carried

out for the same.

Human Resource and manpower Planning is carried out Annually, however it is revisited

every month (sometimes even on a weekly basis) to check for variations and take timely

measures to rectify it.

How is the aggregate manpower planning (junior level employees) carried out?

At BPCL

Manpower planning at BPCL ideally carried out by estimating the man hours required, based

on the estimated business, in house team called NITI that estimates the no. of workman

required, by conducting time and motion study, work quantum and such techniques. This


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team also estimates the requirement of in-house jobs, and the need for outsourcing some

jobs.


To understand the manpower planning and forecasting its important for us tounderstand that how the revenue is generated in this industry

BPO industry broadly generates revenue in 2 types of billing

1. Full Time Equivalent (FTE) Pricing2. Transaction PricingIn FTE based pricing, the client has an agreement with the vendor, to have 50 associates

available at given point of time. Revenue is obtained on the basis of X amount/hour perperson therefore its absolutely imperative that the manpower planning is tight to avoid

any shortage, as any shortage would have direct impact on the revenue.

On the other hand in a transaction pricing, the client has an agreement with the vendor,

to be paid on the basis of per transaction processed. For eg. If the volume is of 80,000

transactions, revenue is as per the 80,000 transaction, if its 20000, revenue is as per

20000 transaction. This type of pricing is characterized by a sudden spike in the volumes

and a sudden drop in the volume, therefore manpower planning, forecasting of volumes

and manpower requirements and scheduling, is of a critical importance.

In a FTE based pricing, the planner surely knows the number that is to be maintained. A

buffer percentage is maintained, which no more than 15%, the reason for this restriction

is to avoid surplus manpower as theres a cost attached to it. The buffer is maintained

primarily to account for planned absenteeism, emergency and sick leaves, late comers,

abscondings high number of unplanned leaves at the time of festive occasion.

In a transaction based pricing the vendor has agreement to process as many volumes, be

it 20,000 or 80,000 transactions. The biggest challenge is, in spite of forecasting the

volumes of transaction, there still might be variation, in the actual volume received toprocess. Forecasting under the normal circumstances is carried out on the basis of

historic data and trend analysis of the previous years. There is also situation, where

certain month might see Huge volumes, where the occupancy level is high. Whereas in

certain months, there might be slack period therefore the occupancy would be low,

however the labour cost incurred will, still be the same.

Manpower requirement is derived from the forecasted volumes. Below mentioned is a

typical calculation carried out to estimate the manpower requirement

Volume/SUT = MAN HRS Required.


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MAN HRS/8 = Raw FTE Required.

Add : 14% shrinkage (industry average)

Add : 80% occupancy

This gives you net FTE Required.

This number of man power is considered as budgeted FTE. The reason this is called

budgeted FTE is any additional FTE would increase the cost; thereby reduce the revenue.

Avg. SUT per transaction is calculated by time and motion studies.

Shrinkage is an accumulation of planned and unplanned leave and absconding.

Occupancy is the total productive time off the 8 hrs shift.

So how is the Current number of people required identified???

Opening balance (existing staff)

Add : head count in training and OJT

Less : Attritions

Less : Promotions

This gives you the closing balance.

Less : Estimated man power required

This gives you manpower surplus and/or deficient.

While planning for manpower, a quarterly plan is developed and revisited every week to

monitor it on a real time basis.

What are the main challenges you face for aggregate capacity planning and

how do you overcome them?

At BPCL

The major challenges faced are that, people are not change ready; they become too

comfortable in their comfort zone. So its important that you break the comfort zone and

its important that its done seamless way. Communication, discussion, debates are carried

put to get people ready for the job. The second challenge is skill set creation. So sometimes

there are less people, hence more number of people require skill enhancement and training

a big number involves its own complicity and huge cost implications. And the third challenge

is dealing with unions.


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The major challenge is to forecast the right level of volumes and according have the right

number of employees. For this purpose we have skilled Workforce Management team and

the Real time Adherence team that only looks into the FSS activities (Forecasting, Staffing

and Scheduling)

The second challenge is managing people issues since its a very people sensitive in dustry.

People can come up with last moment requests, latecomings or just plain monotony. It is

important to be friendly with your people and yet control them. Will issue or skill issue

needs to be tackled before it passes on to others.

How do you carry out forecasting of requirement of labour?

While sending the required numbers to the recruitment team, 2 factors are considered:

1. LEAD time: It includes time required, source the right candidate and provide himample training and on the job learning to make him a skilled resource.

2. Trending of training yield :- This means the historic data of conversion ratio ofnumber that was hired and number that was released to production.

Scheduling is another important aspect. Volumes throughout the day can also be volatile.

There can be peaks and troughs and they are bound to change. Hence scheduling for breaks,

resting time etc is carried out in such a way that maximum staffing is available at the peaktime so as to maintain the grade of service as that is also the part of original agreement.

Peaks and troughs are also observed on particular days in a week.

Eg. Monday is supposed to be a busy day.

Hence planning for leaves etc is done keeping these factors in mind.

At the times when volumes spike abnormally, that is the time when acute shortage of

labour is observed. At such times, support staff (quality assurance, trainers, escalation team)

are also utilized for production. In addition to this, overtime is instated.

Scheduling is primarily done to manage aberrations in the volumes.

What tools are used to identify attrition?

At BPCL

Attrition rate is very low, almost nil. So there have no major issue in term of attrition, in past

5years.


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Attrition trending is observed on basis that the attrition is estimated.

Another tool utilized to identify prospective attrition is a tracker called as (early warning

signal)EWS tracker. This tracker rates an employee on parameters of attitude, skill and

performance. It has a coding of red, amber and green (RAG).

Are there any measures taken to retain the expected attrite?

At BPCL

No Attrition issues


When a possible attrition is identified, there is a one-on-one conversion and an attempt is

made to identify the actual reasons for attrition.

For Eg if the students have come in for a stop gap arrangement, then flexible timings,

permissions are given to the employees to log off during the non peak hours and utilize that

time to study whilst being at work

Counselling is carried out for tenured and skilled resources and the successions plans, if any,

for them are discussed.

Offer them a developmental trainings for self development.

What strategies do you follow for managing shortages and surpluses of labour?

At BPCL

Transfers and redeployments however there has not been an instance of this


If there is a surplus, employees are redeployed, transferred etc.

If there is a short-term surplus, the employees are developed, trained, utilized as floor

walkers and SMEs. This brings about a sense of motivation for the employess and they

look forward.

If there is a deficit, then, there are 2 options :

1. Internal hiring :- If there is any surplus labour available in the orgsanisation.2. External hiring :- This activity is carried out by the recruitment team.


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How is succession planning charted?

At BPCL

Promotion is usually based on seniority and merit.

Theres a talent pipeline thats created to prepare people for new roles and responsibilities,

adequate training is given and 360 degree appraisal is carried down. The corporate HR

evaluates and identifies gaps and accordingly provides exposure and training to the

employee. Downsizing, the perspective it is rightsizing. The methodologies used are

transfers, within location, reskilling and VRS. The HR issues here are slightly different as the

junior level employees are higher in numbers, so if theres a labor surplus in certain regions,

then they are redeployed to the region where there is labour shortage. This surely causes

issues and unrest

If there is no performance and promotion are not considered, internal leadership pool is

generated and maintained for any available position at any location.


A clearly charted Succession Planning is charted for the employees. Customised and tailor

made training programs are developed internally by the organization to develop an internal

pool of talent.

The Succession is based on 2 prime factors i.e Attitude and Performance

What is the ratio of succession for external sources to internal sources?

At BPCL

Almost 100%

At intelenet Global Services

Approximately 95%

What are the main challenges you face for succession planning?

At BPCL

Communication

Familiarising people to the change in the role

Availability of skillset as its not practically possible to training a large number of employees



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Identifying right person with the right skills to match the job.

Skills development trainings are carried out with minimum skills requirements and

competency based interviewing

What are the Developmental strategies used to internally groom candidates?

At BPCL

There are a few Leadership trainings carried out to develop resources internally


As a manager, what you should do is identify and plot competencies of your team. This

helps to identify gaps, be it skill or behavioral. There are STEP programs to mentor and

groom associates to Team Leader level and LEAD program to mentor and groom team

leader to Team Manager

Competency based interviewing is carried out at each of these programs to test the

readiness of the candidate.

What's your perspective on downsizing?

At BPCL

It is termed as Right sizing and this is done through Reskilling, Job Rotations,

Redeployments, and finally VRS

At Intelenet global Services

The company looks at attrition in any form as a cost. The reason being that the company is losing a

skilled manpower and to replace, it will have to incur additional cost. Therefore the business unit has

a monthly attrition target of no more than 6%. Most employees are either redeployed or transferred

to other departments where there is a requirement.


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EXAMPLES OF HR PLANNING AND FORECASTING

I

DELL COMPUTERS

For the past decade, Dell computer has remained one of the worlds fastest growing companies.

Founded in 1984, the organization now has over 35,000 employees , does business in more than 170

countries, and has over$27 billion in annual revenues. One share of Dell stock purchased in its initial

public offering in June 1988 at $8.50 was worth $4,812 as of April 2000. In 1998 alone, Dells

workforce increased by 56 % over the previous year . Dell executives attribute much of this success

to Dells approach to managing human resources. Dell business unit and the vice president of HR.

They attend business unit management team meetings as internal consultants and are involved with

developing the business units each particular business line. Clearly, such phenomenal growth andperformance can only be achieved through a well-designed system for recruiting new hires.

A key to Dells success has been its organizational Human Resource Plan toward recruiting and

training during peak period (OHRP) process. The OHRP process helps Dell to anticipate its demand

for workers to facilitate its growth. The process involves mapping a set of key job openings that are

used to forecast and source inside and outside talent in advance. Dell also requires its HR function to

spot the competencies and sills its new employees will need by analyzing its existing highest

performing employees and determining the keys to their success. Steve Price, vice president of HR

at Dell, notes, We look at people who have been given the biggest merit increases, the best

appraisals, and so forth, and then we interview against these companies.

Dell also utilizes flexible deployment of its HR staff to facilitate its OHRP process. Line managers in

assisting HR with staffing, orientation, and training during peak periods. These individuals lend keen

insights toward recruiting and training as they are the individuals who actually do and oversee the

functional areas . Conversely, during slower recruiting periods such as the Christmas holidays, HR

recruiting staff move over to sales and customer service to assist with peak customer demand

experienced during that time. After the holidays, they return to their HR functions.

IIHuman capital management at the United States Postal Service

With more than 8000,000 employees, the U.S Postal Service (USPS) has the second largest

workforce in the country. The 23 year old post service has an operating budget of $65 billion

and has been under increased competitive pressure from organisation such as Federal

Express, United parcel Service, and Internet service providers, all of whom have eroded

market share and offered alternatives to the traditional enjoyed by the USPS. Current


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projections are that 85% of its executives, 74% of its managers and supervisors, and 50% of

its career workforce will be eligible to retire by 2010.

The postal service has developed a strategy to ensure that it attracts the right people and

then deploys them efficiently to where they are most needed. To ensure that the best

employees are retained, performance management and leadership development programs

have been created to motivate and reward them. At the centre of its human capital

management plan are four key strategies:

1) Aggressive recruitment of future leader2) Building of an effective, motivated workforce in which individuals and teams are

recognised through a performance based pay system

3) Establishment and maintenance of a good work environment , based on cooperativeworking relationship between unionizes employees and management; and

4) Creation of flexible workforce that can be readily adjusted as conditions change andnew need arise.

To facilitate these goals, back office functions have been recognised and consolidated into

85 separate performance clusters. Each cluster has its own HR staff that applied

reengineering principle principles and technology tools to repetitive transactional services

work to create more self service transactions for employees and managers. Performance

management is being integrated into virtually every organisational initiative to ensure that

rewards are commensurate with productivity. Succession planning and corresponding

training and development initiatives have been established to ensure that vital skills areidentified and transferred to up-and-coming employees. The advanced leadership

programme has been developed


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CONCLUSION

After studying the manpower planning and forecasting at BPCL and Intelenet we

conclude the following.

In a PSU like BPCL the human resource planning was carried for a period of 5-10years which leads to inaccurate estimation of manpower as the business scenario

and economic condition are volatile which may make this process over expensive

and futile.

Whereas as in Intelenet the human planning and forecasting roster was updatedweekly giving scope for adapting to the business changes .

Thus we observed that in Intelenet the planning and forecasting is far superior

than that at BPCL. in a private sector importance is given to the customer rather

that the system. Employees being the single most important asset to a company

having the manpower requirement reviews regularly gives Intelenet a better change

as handling the needs of the customer.

HR Planning not only can be strategic tools, it can also help establish an

organizations sustainability competitive advantage. Retaining good workers has

become even more important as it is projected that there will be a shortage of

workers in the future. Achieving competitive success through people requires a

fundamental change in how managers think about their employees and how theyview the work relation. It involves seeing employees as PARTNERS not just as costs

to be minimized avoided.


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Bibliography

The data in the assignment has been collected from,

BOOKS

Human Resource Management

B.B. Mahapatro

Human Resource Management- V.S. Rao

Strategic Human Resource Management -Jeffrey Mellow

Website

www.wikipedia.com

www.smallbusiness.chron.com
http://www.wikipedia.com/http://www.wikipedia.com/

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